UOB analysts Quek Ser Leang and Lee Sue Ann report that the Japanese Yen remains bearish against the US Dollar, though the momentum behind the USD/JPY pair's rise has slowed recently [1]. After closing at 159.19, USD/JPY experienced a sharp pullback, with analysts noting the possibility of the pair testing the 158.70 level. However, they consider a sustained drop below this level, as well as the strong support at 158.40, to be unlikely [1].
In the short term, the USD/JPY traded within a narrow range, closing at 158.96 (+0.03%) on Thursday and at 159.19 (+0.14%) on Friday, before dropping sharply today. Despite this decline, downward momentum has not increased significantly, and resistance levels are identified at 159.05 and 159.25 [1].
From a medium-term perspective, UOB maintains a positive outlook for the US Dollar against the Yen, with the potential for USD/JPY to rise above 159.45. However, they do not expect any further advance to threaten the 2024 high at 162.00 [1]. The analysts emphasize that a breach of the 158.40 support level would shift their outlook from positive to neutral [1].
CONCLUSION
UOB analysts see the Japanese Yen as remaining bearish against the US Dollar, but note that upward momentum is slowing. Key support and resistance levels are being closely watched, with the medium-term outlook still positive unless the 158.40 support is breached. Market participants are likely to monitor these technical levels for further direction.